Monday, December 05, 2005


Gregory Trouble

The U.S. Justice Department's announced that King Pharmaceuticals Inc. has agreed to pay $124 million to resolve claims that it underpaid rebates to state Medicaid programs and overcharged various federal and state entities for its drug products. The federal investigation and settlement was the result of a whistleblower complaint.

“We’re glad the U.S. Justice Department has reached an agreement with King Pharmaceuticals that will allow the taxpayers to recoup at least some of the funds owed to them," said Tennessee Democratic Party Chairman Bob Tuke. "At a time when TennCare and other state Medicaid programs are increasingly strained, it’s important for the nation’s drug companies to live up to their financial and moral commitments.”

“Over the past few years, John Gregory and King Pharmaceuticals have funneled millions of dollars into the accounts of the Tennessee Republican Party and various political action committees and individual campaigns,” Tuke said. “Republican politicians in this state need to do some deep soul-searching if they intend to continue accepting money from the Gregory family and King Pharmaceuticals."

He added, “We’re putting the Republicans on notice today: If you take another dime of this dirty money, the voters are going to hear about it.”

“This is taxpayer money that was taken away from health care for the poor, the sick and the disabled. Unfortunately, state Medicaid programs, including TennCare, only are getting back a fraction of what's really owed to them.”

Tuke said political contributions from Gregory, who founded King Pharmaceuticals, "now clearly are tainted because of the drug maker’s questionable business practices that occurred under his management. In modern politics, this is as close as it gets to blood money. Any member of the Tennessee General Assembly who has taken money with ties to John Gregory or King Pharmaceuticals ought to be ashamed. They ought to return it immediately, or resign."

He chided Republicans who in news reports today defended Gregory as “a good Christian man.” He said, “Taking money from ordinary citizens and funneling it into personal wealth and political contributions is inherently un-Christian. Anyone who received such contributions ought to send them back."
Apparently, King will "pay Tennessee's Medicaid program $5.3 million in reimbursements and penalties for drug over charges over nine years, according to the tentative settlement released today. Of the total from the Bristol, Tenn., company, the state would receive $1.9 million and the federal government the rest, said Sharon Curtis-Flair of the state Attorney General's Office. Half of the total is a penalty, and the remainder is restitution, she said."
Here's some earlier trouble that Gregory got into:
In 2003, a complaint to the Tennessee Registry of Election Finance charged that Gregory had used contributions to a PAC to skirt laws limiting how much individuals can give to a candidate. Gregory was the only contributor to a PAC created by Sen. Ron Ramsey when it donated $15,000 to a Republican Senate candidate. The registry deadlocked along party lines on whether the contribution was improper.

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